81 FR 12998 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Establishing Procedures for the Allocation of Cages to Its Co-Located Users, Including the Waiver of Certain Fees, and To Amend the Visitor Security Escort Requirements and Fee

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 48 (March 11, 2016)

Page Range		12998-13003
FR Document		2016-05433
Federal Register, Volume 81 Issue 48 (Friday, March 11, 2016)
[Federal Register Volume 81, Number 48 (Friday, March 11, 2016)]
[Notices]
[Pages 12998-13003]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-05433]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77302; File No. SR-NYSE-2016-13]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1, Establishing Procedures for the Allocation of Cages to Its Co-
Located Users, Including the Waiver of Certain Fees, and To Amend the 
Visitor Security Escort Requirements and Fee

March 7, 2016.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on February 23, 2016, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. On March 1, 2016, the Exchange filed Amendment No. 1 to 
the proposed rule change.\4\ The Commission is publishing this notice 
to solicit comments on the proposed rule change, as modified by 
Amendment No. 1, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ In Amendment No. 1, the Exchange clarified the proposal to 
specify that the visitor escort fee is equitable because all Users 
of the Exchange's Data Center would be charged the same fee. The 
Exchange also clarified the proposal to specify that while an 
individual User is on the waitlist for a cabinet, it will be granted 
a fee waiver for 2 bundles of 24 cross connects to be used to 
connect that User's non-contiguous cabinets.

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[[Page 12999]]

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to establish procedures for the allocation of 
cages to its co-located Users, including the waiver of certain fees, 
and to amend the visitor security escort requirements and fee. The 
Exchange proposes to amend the Exchange's Price List (``Price List'') 
to reflect the changes The proposed rule change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to establish procedures for the allocation of 
cages to Users, including the waiver of certain fees, and to amend the 
visitor security escort requirements.\5\ The Exchange proposes to amend 
the Price List to reflect the changes.
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    \5\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in 2010. See Securities Exchange Act Release No. 
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56) (the ``Original Co-location Filing''). The Exchange 
operates a data center in Mahwah, New Jersey (the ``Data Center'') 
from which it provides co-location services to Users.
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Proposed Cage Allocation Procedure
    A User is able to purchase a cage to house its cabinets within the 
Data Center.\6\ A cage would typically be purchased by a User that has 
several cabinets within the Data Center and wishes to arrange its 
cabinets contiguously while also enhancing privacy around its cabinets. 
The Exchange offers three sizes of cages corresponding to the number of 
cabinets housed therein, and charges fees for the cages based on the 
size.\7\ The physical footprint of each cage is greater than that of 
the cabinets that it houses, as each cage is constructed so as to 
include aisles around the purchasing User's cabinets, for accessibility 
and in compliance with safety regulations.\8\ Accordingly, in order to 
provide a User with a cage, the Data Center must have sufficient 
contiguous open space available for the cage. The Exchange allocates 
cages on a first come/first serve basis.
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    \6\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange, a ``Hosting User'' 
means a User that hosts a Hosted Customer in the User's co-location 
space, and a ``Hosted Customer'' means a customer of a Hosting User 
that is hosted in a Hosting User's co-location space. See Securities 
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List, 
a User that incurs co-location fees for a particular co-location 
service pursuant thereto would not be subject to co-location fees 
for the same co-location service charged by the Exchange's 
affiliates NYSE MKT and NYSE Arca, Inc. See Securities Exchange Act 
Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) 
(SR-NYSE-2013-59).
    \7\ See Securities Exchange Act Release No. 67666 (August 15, 
2012), 77 FR 50742 (August 22, 2012) (SR-NYSE-2012-18) (``2012 
Release''). A User must have at least two cabinets in the Data 
Center to purchase a cage. See Securities Exchange Act Release No. 
72721 (July 30, 2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-
37) (``2014 Release'').
    \8\ For example, a cage for 20 cabinets takes up as much floor 
space as 33 cabinets.
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    The Data Center opened in 2010, and at that time, the Exchange 
represented that it offers co-location space based on availability and 
that it had sufficient space in the Data Center to accommodate demand 
on an equitable basis for the foreseeable future.\9\ The Exchange 
continues to believe that there is sufficient space in the Data Center 
to accommodate demand.
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    \9\ See Original Co-Location Filing, at 59311.
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    However, much of the space currently available for co-location is 
in smaller segments, resulting from an increasing number of Users, 
multiple moves within the Data Center, and changes to Users' space 
requirements--both increases and decreases--since 2010. Accordingly, in 
2015, the Exchange determined that, to continue to be able to meet its 
obligation to accommodate demand, and in particular to make available 
more contiguous, larger spaces for new and existing Users, it would 
exercise its right to move some Users' equipment within the Data Center 
(the ``Migration'').\10\ The Exchange put procedures in place to manage 
the process for the Migration, and is implementing them.
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    \10\ See Securities Exchange Act Release No. 76269 (October 26, 
2015), 80 FR 66942 (October 30, 2015) SR-NYSE-2015-42 (``Migration 
Release'').
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    While the Migration will make available more contiguous, larger 
spaces for new and existing Users, the Exchange believes that even 
after the Migration such contiguous open space will be limited, and may 
become more limited over time. Accordingly, the Exchange proposes to 
put procedures in place for the allocation of cages if the available 
open contiguous space in the Data Center is not sufficient to house a 
new cage or the open contiguous space available is sufficiently limited 
that the Exchange cannot both provide new cages and satisfy all User 
demand for other co-location services. The proposed procedures are as 
follows:
     The Exchange will place Users seeking new cages on a 
waitlist. The order of Users on the list will be based on the date the 
Exchange receives signed orders for the cages from each User.
     Once the list is established, Users, on a rolling basis, 
will be allocated a cage each time one becomes available.\11\
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    \11\ A cage may become available, for example, if a User 
terminates use of an existing cage or if contiguous cabinets become 
vacant, opening up contiguous space. The Exchange believes that the 
proposed procedures are consistent with the NASDAQ procedures for 
allocating cabinets if NASDAQ's inventory shrinks to zero. See 
Securities Exchange Act Release No. 62397 (June 28, 2010), 75 FR 
38860 (July 6, 2010) (SR-NASDAQ-2010-019).
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     If a cage becomes available and the User that is at the 
top of the waitlist turns it down because it requested a different size 
cage, the Exchange will offer the available cage to the next Users on 
the list, in order, until a User accepts it. A User that turns down a 
cage because it is not the correct size will remain on the waitlist. A 
User that turns down a cage that is the size that it requested will be 
removed from the waitlist.
     If a User requests two cages, after receiving the first 
cage it will move to the bottom of the waitlist.
    In connection with the above procedure, the Exchange proposes to 
waive certain fees for Users that have requested a cage and have been 
added to the waitlist pursuant to the allocation procedure. The 
Exchange expects that, while on the waitlist for a cage or for a larger 
cage, a User may have to use non-contiguous cabinets and/or cages, in 
which case it would connect the cabinets with cross connects, which are 
fiber connections used to connect cabinets within the Data Center.\12\ 
In

[[Page 13000]]

such circumstances, the Exchange proposes to waive the initial and 
monthly fee for two bundles of 24 cross connects between the User's 
non-contiguous cabinets. Once the User is allocated a cage through the 
allocation procedure or is no longer on the waitlist, the Exchange 
would cease to waive the fee.
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    \12\ A User is able to purchase cross connects individually or 
in bundles (i.e., multiple cross connects within a single sheath) of 
six, 12, 18 or 24 cross connects. The Commission approved the fee 
for cross connects between a single User's cabinets within the data 
center in the Original Co-Location Filing. See Original Co-Location 
Filing, at 59311. The use of cross connects was subsequently revised 
to allow each User to purchase cross connects between its cabinet(s) 
and the cabinets of separate Users or a non-User's equipment within 
the Data Center. See 2012 Release, at 50742, and Securities Exchange 
Act Release No. 74222 (February 6, 2015), 80 FR 7888 (February 12, 
2015) (SR-NYSE-2015-05). The Exchange notes that a User with a cage 
may request a new cage, either to add a second cage or to change 
cages. In such a case, the cross connects would be between the 
cabinets within the cage and the non-contiguous cabinets outside the 
cage.
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    As noted above, a User that turns down a cage that is the size that 
it requested will be removed from the waitlist. If such User asks to be 
added back onto the waitlist, the Exchange will add the User to the 
bottom of the waitlist, but will not provide the proposed fee waiver a 
second time.
    The Exchange proposes to amend the Price List to add a new General 
Note 3 to the fee to furnish and install a bundle of 24 cross connects, 
as follows:
    The initial and monthly charge for 2 bundles of 24 cross connects 
will be waived for Users that are waitlisted for a cage for the 
duration of the waitlist period, provided that the cross connects may 
only be used to connect the Users' non-contiguous cabinets. The charge 
will no longer be waived once a User is removed from the waitlist.
     If a waitlist is created, a User seeking a new cage will 
be placed on the waitlist based on the date a signed order for the cage 
is received.
     A User that turns down a cage because it is not the 
correct size will remain on the waitlist. A User that requests to be 
removed or that turns down a cage that is the size that it requested 
will be removed from the waitlist.
     A User that is removed from the waitlist but subsequently 
requests a cage will be added back to the bottom of the waitlist, 
provided that, if the User was removed from the waitlist because it 
turned down a cage that is the size that it requested, it will not 
receive a second waiver of the charge.
Visitor Security Escorts
    Currently, all User representatives are required to have a visitor 
security escort during visits to the Data Center, including User 
representatives who have a permanent Data Center site access badge.\13\ 
The Exchange proposes to amend the description of the visitor security 
escort fee to provide that it would not apply to User representatives 
visiting the User's cage and to provide that the cost is $75 per visit.
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    \13\ See Securities Exchange Act Release No. 62732 (August 16, 
2010), 75 FR 51512 (August 20, 2010) (SR-NYSE-2010-56) (notice of 
proposed rule change amending price list to reflect fees charged for 
co-location services); see also Original Co-location Filing, at 
59311. Fees for visitor security escorts for the move of a User's 
equipment within the Data Center are waived when incurred in 
connection with such a move required by the Exchange as part of the 
Migration. See Migration Release, at 66943.
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    The Exchange requires visitor security escorts for security 
purposes, primarily to ensure that a visitor does not interfere with 
the cabinets of other Users or Exchange equipment. The Exchange 
believes it is not necessary to have a User representative accompanied 
by a visitor security escort when the representative is visiting the 
User's cage, because the User representative would only have access to 
that User's cabinets, which would be in the confined area within the 
locked cage. The User representative would not have access to the 
cabinets of other Users or Exchange equipment, which are locked as 
well. By comparison, Users that do not have cages share colocation 
space with other Users. While such spaces are locked, more than one 
User may have cabinets within a given locked space, and so a visitor 
security escort is warranted.
    The Exchange proposes to make several additional non-substantive 
changes to the description of the visitor security escort fee, to 
reduce redundancy and increase clarity. The current description is as 
follows:
    NYSE employee escort, which is required during User visits to the 
data center. (Note: all User representatives are required to have a 
visitor security escort during visits to the data center, including 
User representatives who have a permanent data center site access 
badge.)
    The proposed description of the visitor escort fee would read as 
follows:
    All User representatives are required to be accompanied by a 
visitor security escort during visits to the data center unless 
visiting the User's cage. Requirement includes User representatives who 
have a permanent data center site access badge.
    The Exchange proposes to remove the first clause, with its 
reference to the visitor security escort as an ``NYSE employee 
escort,'' because it is redundant with the parenthetical and because 
the reference to ``NYSE employees'' could be potentially confusing, 
given that not just the NYSE but also its affiliates, NYSE MKT LLC and 
NYSE Arca, Inc., provide co-location services at the Data Center. In 
addition, the Exchange proposes to use ``accompanied by a visitor 
security escort'' rather than ``have a visitor security escort'' 
because it believes that ``accompanied'' makes it more clear that the 
escort will accompany the User representative.
    The Price List includes a Visitor Security Escort fee of $75 per 
hour. The Exchange proposes to amend the Price List to charge Users $75 
per visit for such visitor security escorts. Based on the Exchange's 
experience, currently many of the escorted visits last an hour or less, 
and for Users that do not have a cage, escorted visits are typically 
about an hour.
General
    As is the case with all Exchange co-location arrangements, (i) 
neither a User nor any of the User's customers would be permitted to 
submit orders directly to the Exchange unless such User or customer is 
a member organization, a Sponsored Participant or an agent thereof 
(e.g., a service bureau providing order entry services); (ii) use of 
the co-location services proposed herein would be completely voluntary 
and available to all Users on a non-discriminatory basis; \14\ and 
(iii) a User would only incur one charge for the particular co-location 
service described herein, regardless of whether the User connects only 
to the Exchange or to the Exchange and one or both of its 
affiliates.\15\
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    \14\ As is currently the case, Users that receive co-location 
services from the Exchange will not receive any means of access to 
the Exchange's trading and execution systems that is separate from, 
or superior to, that of others with access to the Exchange's trading 
and execution systems. In this regard, all orders sent to the 
Exchange enter the Exchange's trading and execution systems through 
the same order gateway, regardless of whether the sender is co-
located in the Data Center or not. In addition, co-located Users do 
not receive any market data or data service product that is not 
available to users that have access to the Exchange's trading and 
execution systems, although Users that receive co-location services 
normally would expect reduced latencies in sending orders to, and 
receiving market data from, the Exchange.
    \15\ See SR-NYSE-2013-59, supra note 5 at 51766. The Exchange's 
affiliates have also submitted substantially the same proposed rule 
change. See SR-NYSEMKT-2016-17 and SR-NYSEArca-2016-21.
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    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.

[[Page 13001]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\16\ in general, and furthers the 
objectives of sections 6(b)(5) of the Act,\17\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed procedure for allocating 
cages is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers because the proposal would 
establish rational, objective procedures that would be applied 
uniformly by the Exchange to Users that requested cages and would not 
unfairly discriminate among similarly situated Users of co-location 
services. All Users seeking to purchase a cage would be subject to the 
same procedures. The Exchange believes that the proposed procedure 
would serve to reduce any potential for confusion on how cages would be 
allocated should it become necessary. In addition, the proposed 
allocation procedure would assist the Exchange to ensure that it has 
sufficient space in the Data Center to accommodate demand for co-
location services on an equitable basis for the foreseeable future.
    The Exchange believes that the proposal to waive fees for two 
bundles of 24 cross connects between a waitlisted User's non-contiguous 
cabinets is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers because the waiver would be 
applied uniformly by the Exchange to all waitlisted Users and would not 
unfairly discriminate among similarly situated Users of co-location 
services. A waitlisted User would only require cross connects between 
its non-contiguous cabinets due to the waitlist. If, instead of being 
put on the waitlist, the User had received the cage it requested, the 
User would not require the cross connects. In addition, the Exchange 
proposes that the cross connects could only be used to connect the 
User's non-contiguous cabinets. The waiver would help to alleviate the 
inconvenience for the waitlisted User of having cabinets in non-
contiguous space by directly addressing, for the time period during 
which the User is waitlisted, a cost directly related to being on the 
waitlist. Once the User was allocated a cage through the allocation 
procedure or was removed from the waitlist, the Exchange would cease to 
waive the fee.
    The Exchange believes that the proposed amendment to the visitor 
security escort fee is not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers because the escort fee 
would be applied uniformly by the Exchange to all Users unless a User 
representative was visiting the User's cage, and would not unfairly 
discriminate among similarly situated Users of co-location services.
    The Exchange also believes that the proposed rule change is 
consistent with section 6(b)(4),\18\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers.
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    \18\ 15 U.S.C. 78f(b)(4), (5).
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    The Exchange believes that the proposed procedure for allocating 
cages is equitable and not unfairly discriminatory because the cages 
are offered simply as a convenience to Users. A User does not require a 
cage to trade on the Exchange, and usage of a cage has no effect on a 
User's orders going to, or trade data coming from, the Exchange, or the 
User's ability to utilize other co-location services. The proposed 
allocation procedure would assist the Exchange to ensure that it has 
sufficient space in the Data Center to accommodate demand for co-
location services on an equitable basis for the foreseeable future.
    The Exchange believes that the proposal to waive fees for two 
bundles of 24 cross connects between a waitlisted User's non-contiguous 
cabinets is equitable and not unfairly discriminatory because a 
waitlisted User would only require the cross connects due to the 
waitlist. If, instead of being put on the waitlist, the User had 
received the cage it requested, the User would not require the cross 
connects. In addition, the Exchange proposes that the cross connects 
could only be used to connect the User's non-contiguous cabinets. The 
waiver would help to alleviate the inconvenience for the waitlisted 
User of having cabinets in non-contiguous space by directly addressing, 
for the time period during which the User is waitlisted, a cost 
directly related to being on the waitlist. Once the User was allocated 
a cage through the allocation procedure or was removed from the 
waitlist, the Exchange would cease to waive the fee.
    The Exchange believes that the proposed amendment to the visitor 
security escort fee is equitable and not unfairly discriminatory 
because the escort fee would be applied uniformly by the Exchange to 
all Users unless a User representative was visiting the User's cage, 
and would not unfairly discriminate among similarly situated Users of 
co-location services. The same requirements and fees would be applied 
uniformly to all Users. The Exchange believes that the amendment is 
equitable because the security purposes that lead the Exchange to 
require visitor security escorts, namely to ensure that a visitor does 
not interfere with the cabinets of other Users or Exchange equipment, 
are not present when a User representative is visiting the User's cage, 
because the User representative would only have access to the Users' 
cabinets, which would be in the confined area within the locked cage. 
The User representative would not have access to the cabinets of other 
Users or Exchange equipment, which are locked as well.
    The Exchange believes that the proposed allocation procedure for 
cages is reasonable because the proposal would establish rational, 
objective procedures that would be applied uniformly by the Exchange to 
Users. All Users seeking to purchase a cage would be subject to the 
same procedures. In addition, the Exchange believes that the proposed 
procedure would serve to reduce any potential for confusion on how 
cages would be allocated should it become necessary.
    The Exchange believes that the proposal to waive fees for two 
bundles of 24 cross connects between a waitlisted User's non-contiguous 
cabinets is reasonable because the waitlisted User would only require 
the cross connects due to the waitlist. If, instead of being put on the 
waitlist, the User had received the cage it requested, the User would 
not require the cross connects. In addition, the Exchange proposes that 
the cross connects could only be used to connect the User's non-
contiguous cabinets. The waiver would help to alleviate the 
inconvenience for the waitlisted User of having cabinets in non-
contiguous space by directly addressing, for the time period during 
which the User is waitlisted, a cost directly related to being on the 
waitlist. In addition, the Exchange believes that

[[Page 13002]]

the proposal is reasonable because once the User was allocated a cage 
through the allocation procedure or was removed from the waitlist, the 
Exchange would cease to waive the fee.
    The Exchange also believes that, if a User is removed from the 
waitlist because it turned down a cage that is the size that it 
requested, it is reasonable not to provide the User a second waiver of 
the fee if the User subsequently requests a cage. To provide a second 
waiver would create an incentive for a User to use the waitlist to 
avoid paying the waived fees for cross connects despite being given an 
opportunity to get off the waitlist.
    The Exchange believes that the proposed amendments to the visitor 
security escort fee are reasonable, because the security purposes that 
lead the Exchange to visitor security escorts, namely to ensure that a 
visitor does not interfere with the cabinets of other Users or Exchange 
equipment, are not present when a User representative is visiting the 
User's cage, because the User representative would only have access to 
the Users' cabinets, which would be in the confined area within the 
locked cage. The User representative would not have access to the 
cabinets of other Users or Exchange equipment, which are locked as 
well. Finally, the Exchange believes that its non-substantive changes 
to the description of the visitor security escort fee are reasonable, 
because they would reduce redundancy and increase clarity in the 
description.
    The Exchange believes that the proposed rate of $75 per visit for 
the Visitor Security Escort, as opposed to $75 per hour, is equitable 
because all Users would be subject to the same fee. The Exchange 
believes that charging a flat fee per visit is consistent with fees for 
other services performed by data center staff, including Change Fees 
and Initial Install Services.\19\ The proposed rate of $75 per visit 
for the Visitor Security Escort would be a fee reduction for any visit 
that lasted more than an hour, and so it would reduce the burden placed 
on Users that are still subject to the fee.
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    \19\ See 2012 Release, supra note 6, at 50743, and 2014 Release, 
supra note 6, at 45562. Change Fees are charged per request and 
Initial Install Services fees are charged per cabinet or eight-rack 
unit in a partial cabinet.
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    For the reasons above, the proposed changes do not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions established from time to time by the Exchange.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with section 6(b)(8) of the Act,\20\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The Exchange believes that the proposed allocation 
procedures for cages would not impose any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act 
because the proposed allocation procedure would assist the Exchange to 
ensure that it has sufficient space in the Data Center to accommodate 
demand for co-location services on an equitable basis for the 
foreseeable future. Similarly, the Exchange believes that the proposed 
fee waiver would facilitate the proposed allocation procedure, which 
would in turn facilitate use of the Data Center and provide access to 
the Data Center to current and additional market participants. In 
addition, because a User does not require a cage to trade on the 
Exchange, and usage of a cage has no effect on a User's orders going 
to, or trade data coming from, the Exchange, or the User's ability to 
utilize other co-location services, the Exchange believes that being 
waitlisted for a cage will not impose a burden on a User's ability to 
compete. The Exchange believes that the proposed allocation procedure 
would establish rational, objective procedures that would reduce any 
potential for User confusion on how cages would be allocated should it 
become necessary.
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    \20\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that the proposed amendment to the visitor 
security escort fee would not impose any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act 
because it would eliminate an unnecessary requirement, as the security 
purposes that lead the Exchange to visitor security escorts are not 
present when a User representative is visiting the User's cage, because 
the User representative would only have access to the Users' cabinets, 
which would be in the confined area within the locked cage. The User 
representative would not have access to the cabinets of other Users or 
Exchange equipment, which are locked as well. The proposed rate of $75 
per visit for the Visitor Security Escort would be a fee reduction for 
any visit that lasted more than an hour, and so it would reduce the 
burden placed on Users that are still subject to the fee.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually 
review, and consider adjusting, its services and related fees and 
credits to remain competitive with other exchanges. For the reasons 
described above, the Exchange believes that the proposed rule change 
reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission shall: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-NYSE-2016-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.


[[Page 13003]]


All submissions should refer to File No. SR-NYSE-2016-13. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File No. SR-NYSE-2016-13, and should be 
submitted on or before April 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-05433 Filed 3-10-16; 8:45 am]
 BILLING CODE 8011-01-P
12998 Federal Register / Vol. 81, No. 48 / Friday, March 11, 2016 / Notices

The Exchange believes that its foregoing proposed rule change has inspection and copying at the principal
proposal is consistent with section 6(b) become effective pursuant to section office of the Exchange. All comments
of the Act,11 in general, and furthers the 19(b)(3)(A)(iii) of the Ac 14 and Rule received will be posted without change;
objectives of section 6(b)(5) of the Act,12 19b–4(f)(3) thereunder.15 the Commission does not edit personal
in particular, in that it is designed to At any time within 60 days of the identifying information from
promote just and equitable principles of filing of the proposed rule change, the submissions. You should submit only
trade, to remove impediments to and Commission summarily may information that you wish to make
perfect the mechanism of a free and temporarily suspend such rule change if
available publicly. All submissions
open market and a national market it appears to the Commission that such
action is: (1) Necessary or appropriate in should refer to File Number SR–BATS–
system, and, in general to protect
the public interest; (2) for the protection 2016–25, and should be submitted on or
investors and the public interest. The
of investors; or (3) otherwise in before April 1, 2016.
Exchange also believes that the
proposed rule change is consistent with furtherance of the purposes of the Act. For the Commission, by the Division of
section 6(b)(1) of the Act 13 in that it is If the Commission takes such action, the Trading and Markets, pursuant to delegated
designed to continue to ensure that the Commission shall institute proceedings authority.16
Exchange is so organized and has the to determine whether the proposed rule Robert W. Errett,
capacity to carry out the purposes of Act should be approved or disapproved. Deputy Secretary.
and to comply, and enforce compliance IV. Solicitation of Comments [FR Doc. 2016–05438 Filed 3–10–16; 8:45 am]
by its members with the provisions of
the Act and the rules and regulations Interested persons are invited to BILLING CODE 8011–01–P

thereunder, and rules of the Exchange. submit written data, views, and
The Exchange is proposing amendments arguments concerning the foregoing,
including whether the proposed rule SECURITIES AND EXCHANGE
to the Operative Documents to
change is consistent with the Act. COMMISSION
effectuate its name change to Bats BZX
Exchange, Inc. and to reflect the name Comments may be submitted by any of
changes of its affiliates. These changes the following methods: [Release No. 34–77302; File No. SR–NYSE–
are limited to capitalization and 2016–13]
Electronic Comments
ministerial name changes and to reflect • Use the Commission’s Internet Self-Regulatory Organizations; New
similar proposed rule changes to be comment form (http://www.sec.gov/
submitted to the Commission by the York Stock Exchange LLC; Notice of
rules/sro.shtml); or Filing of Proposed Rule Change, as
Exchange’s affiliates. The Exchange • Send an email to rule-comments@
believes that the changes will protect Modified by Amendment No. 1,
sec.gov. Please include File Number SR–
investors and the public interest by Establishing Procedures for the
BATS–2016–25 on the subject line.
eliminating confusion that may exist Allocation of Cages to Its Co-Located
because of differences between its Paper Comments Users, Including the Waiver of Certain
corporate name and the new naming • Send paper comments in triplicate Fees, and To Amend the Visitor
conventions of the Parent and its to Secretary, Securities and Exchange Security Escort Requirements and Fee
subsidiaries, including the Exchange. Commission, 100 F Street NE.,
Washington, DC 20549–1090. March 7, 2016.
B. Self-Regulatory Organization’s
All submissions should refer to File Pursuant to section 19(b)(1) 1 of the
Statement on Burden on Competition
Number SR–BATS–2016–25. This file Securities Exchange Act of 1934 (the
Because the rule change proposes number should be included on the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
ministerial changes related to the subject line if email is used. To help the notice is hereby given that, on February
administration, and not the governance Commission process and review your 23, 2016, New York Stock Exchange
or operation, of the Exchange, the comments more efficiently, please use LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
Exchange does not believe that the only one method. The Commission will with the Securities and Exchange
proposed rule change will impose any post all comments on the Commission’s
burden on competition not necessary or Commission (the ‘‘Commission’’) the
Internet Web site (http://www.sec.gov/ proposed rule change as described in
appropriate in furtherance of the rules/sro.shtml). Copies of the
purposes of the Act. Items I and II below, which Items have
submission, all subsequent been prepared by the self-regulatory
C. Self-Regulatory Organization’s amendments, all written statements organization. On March 1, 2016, the
Statement on Comments on the with respect to the proposed rule Exchange filed Amendment No. 1 to the
Proposed Rule Change Received From change that are filed with the proposed rule change.4 The Commission
Members, Participants, or Others Commission, and all written
is publishing this notice to solicit
The Exchange has not solicited, and communications relating to the
comments on the proposed rule change,
does not intend to solicit, comments on proposed rule change between the
Commission and any person, other than as modified by Amendment No. 1, from
this proposed rule change. The interested persons.
Exchange has not received any those that may be withheld from the
unsolicited written comments from public in accordance with the
Members or other interested parties. provisions of 5 U.S.C. 552, will be 16 17 CFR 200.30–3(a)(12).
available for Web site viewing and 1 15 U.S.C. 78s(b)(1).
asabaliauskas on DSK3SPTVN1PROD with NOTICES

III. Date of Effectiveness of the printing in the Commission’s Public 2 15 U.S.C. 78a.

Proposed Rule Change and Timing for Reference Room, 100 F Street NE., 3 17 CFR 240.19b–4.
4 In Amendment No. 1, the Exchange clarified the
Commission Action Washington, DC 20549, on official proposal to specify that the visitor escort fee is
Because it is concerned solely with business days between the hours of equitable because all Users of the Exchange’s Data
the administration of the Exchange, the 10:00 a.m. and 3:00 p.m. Copies of the Center would be charged the same fee. The
filing also will be available for Exchange also clarified the proposal to specify that
while an individual User is on the waitlist for a
11 15 U.S.C. 78f. cabinet, it will be granted a fee waiver for 2 bundles
12 15 U.S.C. 78f(b)(5). 14 15 U.S.C. 78s(b)(3)(A)(iii). of 24 cross connects to be used to connect that
13 15 U.S.C. 78f(b)(1). 15 17 CFR 240.19b–4(f)(3). User’s non-contiguous cabinets.

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I. Self-Regulatory Organization’s purchased by a User that has several process for the Migration, and is
Statement of the Terms of the Substance cabinets within the Data Center and implementing them.
of the Proposed Rule Change wishes to arrange its cabinets While the Migration will make
The Exchange proposes to establish contiguously while also enhancing available more contiguous, larger spaces
procedures for the allocation of cages to privacy around its cabinets. The for new and existing Users, the
its co-located Users, including the Exchange offers three sizes of cages Exchange believes that even after the
waiver of certain fees, and to amend the corresponding to the number of cabinets Migration such contiguous open space
visitor security escort requirements and housed therein, and charges fees for the will be limited, and may become more
fee. The Exchange proposes to amend cages based on the size.7 The physical limited over time. Accordingly, the
the Exchange’s Price List (‘‘Price List’’) footprint of each cage is greater than Exchange proposes to put procedures in
to reflect the changes The proposed rule that of the cabinets that it houses, as place for the allocation of cages if the
change is available on the Exchange’s each cage is constructed so as to include available open contiguous space in the
Web site at www.nyse.com, at the aisles around the purchasing User’s Data Center is not sufficient to house a
principal office of the Exchange, and at cabinets, for accessibility and in new cage or the open contiguous space
the Commission’s Public Reference compliance with safety regulations.8 available is sufficiently limited that the
Room. Accordingly, in order to provide a User Exchange cannot both provide new
with a cage, the Data Center must have cages and satisfy all User demand for
II. Self-Regulatory Organization’s other co-location services. The proposed
sufficient contiguous open space
Statement of the Purpose of, and procedures are as follows:
available for the cage. The Exchange
Statutory Basis for, the Proposed Rule • The Exchange will place Users
Change allocates cages on a first come/first serve
basis. seeking new cages on a waitlist. The
In its filing with the Commission, the order of Users on the list will be based
self-regulatory organization included The Data Center opened in 2010, and on the date the Exchange receives
statements concerning the purpose of, at that time, the Exchange represented signed orders for the cages from each
and basis for, the proposed rule change that it offers co-location space based on User.
and discussed any comments it received availability and that it had sufficient • Once the list is established, Users,
on the proposed rule change. The text space in the Data Center to on a rolling basis, will be allocated a
of those statements may be examined at accommodate demand on an equitable cage each time one becomes available.11
the places specified in Item IV below. basis for the foreseeable future.9 The • If a cage becomes available and the
The Exchange has prepared summaries, Exchange continues to believe that there User that is at the top of the waitlist
set forth in sections A, B, and C below, is sufficient space in the Data Center to turns it down because it requested a
of the most significant parts of such accommodate demand. different size cage, the Exchange will
statements. However, much of the space currently offer the available cage to the next Users
available for co-location is in smaller on the list, in order, until a User accepts
A. Self-Regulatory Organization’s
segments, resulting from an increasing it. A User that turns down a cage
Statement of the Purpose of, and
number of Users, multiple moves within because it is not the correct size will
Statutory Basis for, the Proposed Rule
the Data Center, and changes to Users’ remain on the waitlist. A User that turns
Change
space requirements—both increases and down a cage that is the size that it
1. Purpose decreases—since 2010. Accordingly, in requested will be removed from the
The Exchange proposes to establish 2015, the Exchange determined that, to waitlist.
procedures for the allocation of cages to continue to be able to meet its obligation • If a User requests two cages, after
Users, including the waiver of certain to accommodate demand, and in receiving the first cage it will move to
fees, and to amend the visitor security particular to make available more the bottom of the waitlist.
escort requirements.5 The Exchange contiguous, larger spaces for new and In connection with the above
proposes to amend the Price List to existing Users, it would exercise its procedure, the Exchange proposes to
reflect the changes. right to move some Users’ equipment waive certain fees for Users that have
within the Data Center (the requested a cage and have been added
Proposed Cage Allocation Procedure ‘‘Migration’’).10 The Exchange put to the waitlist pursuant to the allocation
A User is able to purchase a cage to procedures in place to manage the procedure. The Exchange expects that,
house its cabinets within the Data while on the waitlist for a cage or for a
Center.6 A cage would typically be 2015–40). As specified in the Price List, a User that larger cage, a User may have to use non-
incurs co-location fees for a particular co-location contiguous cabinets and/or cages, in
5 The Exchange initially filed rule changes service pursuant thereto would not be subject to co- which case it would connect the
location fees for the same co-location service
relating to its co-location services with the
charged by the Exchange’s affiliates NYSE MKT and
cabinets with cross connects, which are
Securities and Exchange Commission fiber connections used to connect
(‘‘Commission’’) in 2010. See Securities Exchange NYSE Arca, Inc. See Securities Exchange Act
Act Release No. 62960 (September 21, 2010), 75 FR Release No. 70206 (August 15, 2013), 78 FR 51765 cabinets within the Data Center.12 In
59310 (September 27, 2010) (SR–NYSE–2010–56) (August 21, 2013) (SR–NYSE–2013–59).
7 See Securities Exchange Act Release No. 67666
(the ‘‘Original Co-location Filing’’). The Exchange 11 A cage may become available, for example, if

operates a data center in Mahwah, New Jersey (the (August 15, 2012), 77 FR 50742 (August 22, 2012) a User terminates use of an existing cage or if
‘‘Data Center’’) from which it provides co-location (SR–NYSE–2012–18) (‘‘2012 Release’’). A User must contiguous cabinets become vacant, opening up
services to Users. have at least two cabinets in the Data Center to contiguous space. The Exchange believes that the
asabaliauskas on DSK3SPTVN1PROD with NOTICES

6 For purposes of the Exchange’s co-location purchase a cage. See Securities Exchange Act proposed procedures are consistent with the
services, a ‘‘User’’ means any market participant Release No. 72721 (July 30, 2014), 79 FR 45562 NASDAQ procedures for allocating cabinets if
that requests to receive co-location services directly (August 5, 2014) (SR–NYSE–2014–37) (‘‘2014 NASDAQ’s inventory shrinks to zero. See Securities
from the Exchange, a ‘‘Hosting User’’ means a User Release’’). Exchange Act Release No. 62397 (June 28, 2010), 75
8 For example, a cage for 20 cabinets takes up as
that hosts a Hosted Customer in the User’s co- FR 38860 (July 6, 2010) (SR–NASDAQ–2010–019).
location space, and a ‘‘Hosted Customer’’ means a much floor space as 33 cabinets. 12 A User is able to purchase cross connects
9 See Original Co-Location Filing, at 59311.
customer of a Hosting User that is hosted in a individually or in bundles (i.e., multiple cross
Hosting User’s co-location space. See Securities 10 See Securities Exchange Act Release No. 76269 connects within a single sheath) of six, 12, 18 or
Exchange Act Release No. 76008 (September 29, (October 26, 2015), 80 FR 66942 (October 30, 2015) 24 cross connects. The Commission approved the
2015), 80 FR 60190 (October 5, 2015) (SR–NYSE– SR–NYSE–2015–42 (‘‘Migration Release’’). Continued

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2. Statutory Basis connects could only be used to connect non-contiguous space by directly
The Exchange believes that the the User’s non-contiguous cabinets. The addressing, for the time period during
proposed rule change is consistent with waiver would help to alleviate the which the User is waitlisted, a cost
section 6(b) of the Act,16 in general, and inconvenience for the waitlisted User of directly related to being on the waitlist.
furthers the objectives of sections 6(b)(5) having cabinets in non-contiguous space Once the User was allocated a cage
by directly addressing, for the time through the allocation procedure or was
of the Act,17 in particular, because it is
period during which the User is removed from the waitlist, the Exchange
designed to prevent fraudulent and
waitlisted, a cost directly related to would cease to waive the fee.
manipulative acts and practices, to The Exchange believes that the
being on the waitlist. Once the User was
promote just and equitable principles of proposed amendment to the visitor
allocated a cage through the allocation
trade, to foster cooperation and security escort fee is equitable and not
procedure or was removed from the
coordination with persons engaged in unfairly discriminatory because the
waitlist, the Exchange would cease to
regulating, clearing, settling, processing escort fee would be applied uniformly
waive the fee.
information with respect to, and The Exchange believes that the by the Exchange to all Users unless a
facilitating transactions in securities, to proposed amendment to the visitor User representative was visiting the
remove impediments to, and perfect the security escort fee is not designed to User’s cage, and would not unfairly
mechanisms of, a free and open market permit unfair discrimination between discriminate among similarly situated
and a national market system and, in customers, issuers, brokers, or dealers Users of co-location services. The same
general, to protect investors and the because the escort fee would be applied requirements and fees would be applied
public interest and because it is not uniformly by the Exchange to all Users uniformly to all Users. The Exchange
designed to permit unfair unless a User representative was visiting believes that the amendment is
discrimination between customers, the User’s cage, and would not unfairly equitable because the security purposes
issuers, brokers, or dealers. discriminate among similarly situated that lead the Exchange to require visitor
The Exchange believes that the Users of co-location services. security escorts, namely to ensure that
proposed procedure for allocating cages The Exchange also believes that the a visitor does not interfere with the
is not designed to permit unfair proposed rule change is consistent with cabinets of other Users or Exchange
discrimination between customers, section 6(b)(4),18 in particular, in that it equipment, are not present when a User
issuers, brokers, or dealers because the provides for the equitable allocation of representative is visiting the User’s cage,
proposal would establish rational, reasonable dues, fees, and other charges because the User representative would
objective procedures that would be among its members, issuers and other only have access to the Users’ cabinets,
applied uniformly by the Exchange to persons using its facilities and does not which would be in the confined area
Users that requested cages and would unfairly discriminate between within the locked cage. The User
not unfairly discriminate among customers, issuers, brokers or dealers. representative would not have access to
similarly situated Users of co-location The Exchange believes that the the cabinets of other Users or Exchange
services. All Users seeking to purchase proposed procedure for allocating cages equipment, which are locked as well.
a cage would be subject to the same is equitable and not unfairly The Exchange believes that the
procedures. The Exchange believes that discriminatory because the cages are proposed allocation procedure for cages
the proposed procedure would serve to offered simply as a convenience to is reasonable because the proposal
reduce any potential for confusion on Users. A User does not require a cage to would establish rational, objective
how cages would be allocated should it trade on the Exchange, and usage of a procedures that would be applied
become necessary. In addition, the cage has no effect on a User’s orders uniformly by the Exchange to Users. All
proposed allocation procedure would going to, or trade data coming from, the Users seeking to purchase a cage would
assist the Exchange to ensure that it has Exchange, or the User’s ability to utilize be subject to the same procedures. In
sufficient space in the Data Center to other co-location services. The proposed addition, the Exchange believes that the
accommodate demand for co-location allocation procedure would assist the proposed procedure would serve to
services on an equitable basis for the Exchange to ensure that it has sufficient reduce any potential for confusion on
foreseeable future. space in the Data Center to how cages would be allocated should it
The Exchange believes that the accommodate demand for co-location become necessary.
proposal to waive fees for two bundles services on an equitable basis for the The Exchange believes that the
of 24 cross connects between a foreseeable future. proposal to waive fees for two bundles
waitlisted User’s non-contiguous The Exchange believes that the of 24 cross connects between a
cabinets is not designed to permit unfair proposal to waive fees for two bundles waitlisted User’s non-contiguous
discrimination between customers, of 24 cross connects between a cabinets is reasonable because the
issuers, brokers, or dealers because the waitlisted User’s non-contiguous waitlisted User would only require the
waiver would be applied uniformly by cabinets is equitable and not unfairly cross connects due to the waitlist. If,
the Exchange to all waitlisted Users and discriminatory because a waitlisted User instead of being put on the waitlist, the
would not unfairly discriminate among would only require the cross connects User had received the cage it requested,
similarly situated Users of co-location due to the waitlist. If, instead of being the User would not require the cross
services. A waitlisted User would only put on the waitlist, the User had connects. In addition, the Exchange
require cross connects between its non- received the cage it requested, the User proposes that the cross connects could
would not require the cross connects. In only be used to connect the User’s non-
asabaliauskas on DSK3SPTVN1PROD with NOTICES

contiguous cabinets due to the waitlist.
If, instead of being put on the waitlist, addition, the Exchange proposes that contiguous cabinets. The waiver would
the User had received the cage it the cross connects could only be used help to alleviate the inconvenience for
requested, the User would not require to connect the User’s non-contiguous the waitlisted User of having cabinets in
the cross connects. In addition, the cabinets. The waiver would help to non-contiguous space by directly
Exchange proposes that the cross alleviate the inconvenience for the addressing, for the time period during
waitlisted User of having cabinets in which the User is waitlisted, a cost
16 15 U.S.C. 78f(b). directly related to being on the waitlist.
17 15 U.S.C. 78f(b)(5). 18 15 U.S.C. 78f(b)(4), (5). In addition, the Exchange believes that

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the proposal is reasonable because once Finally, the Exchange believes that it Exchange equipment, which are locked
the User was allocated a cage through is subject to significant competitive as well. The proposed rate of $75 per
the allocation procedure or was forces, as described below in the visit for the Visitor Security Escort
removed from the waitlist, the Exchange Exchange’s statement regarding the would be a fee reduction for any visit
would cease to waive the fee. burden on competition. that lasted more than an hour, and so it
The Exchange also believes that, if a For these reasons, the Exchange would reduce the burden placed on
User is removed from the waitlist believes that the proposal is consistent Users that are still subject to the fee.
because it turned down a cage that is the with the Act. Finally, the Exchange notes that it
size that it requested, it is reasonable operates in a highly competitive market
B. Self-Regulatory Organization’s
not to provide the User a second waiver in which market participants can
Statement on Burden on Competition
of the fee if the User subsequently readily favor competing venues if they
requests a cage. To provide a second In accordance with section 6(b)(8) of deem fee levels at a particular venue to
waiver would create an incentive for a the Act,20 the Exchange believes that the be excessive. In such an environment,
User to use the waitlist to avoid paying proposed rule change will not impose the Exchange must continually review,
the waived fees for cross connects any burden on competition that is not and consider adjusting, its services and
despite being given an opportunity to necessary or appropriate in furtherance related fees and credits to remain
get off the waitlist. of the purposes of the Act. The competitive with other exchanges. For
The Exchange believes that the Exchange believes that the proposed the reasons described above, the
proposed amendments to the visitor allocation procedures for cages would Exchange believes that the proposed
security escort fee are reasonable, not impose any burden on competition rule change reflects this competitive
because the security purposes that lead that is not necessary or appropriate in environment.
the Exchange to visitor security escorts, furtherance of the purposes of the Act
namely to ensure that a visitor does not because the proposed allocation C. Self-Regulatory Organization’s
interfere with the cabinets of other procedure would assist the Exchange to Statement on Comments on the
Users or Exchange equipment, are not ensure that it has sufficient space in the Proposed Rule Change Received From
present when a User representative is Data Center to accommodate demand for Members, Participants, or Others
visiting the User’s cage, because the co-location services on an equitable No written comments were solicited
User representative would only have basis for the foreseeable future. or received with respect to the proposed
access to the Users’ cabinets, which Similarly, the Exchange believes that rule change.
would be in the confined area within the proposed fee waiver would facilitate
the locked cage. The User representative the proposed allocation procedure, III. Date of Effectiveness of the
would not have access to the cabinets of which would in turn facilitate use of the Proposed Rule Change and Timing for
other Users or Exchange equipment, Data Center and provide access to the Commission Action
which are locked as well. Finally, the Data Center to current and additional Within 45 days of the date of
Exchange believes that its non- market participants. In addition, publication of this notice in the Federal
substantive changes to the description because a User does not require a cage Register or within such longer period (i)
of the visitor security escort fee are to trade on the Exchange, and usage of as the Commission may designate up to
reasonable, because they would reduce a cage has no effect on a User’s orders 90 days of such date if it finds such
redundancy and increase clarity in the going to, or trade data coming from, the longer period to be appropriate and
description. Exchange, or the User’s ability to utilize publishes its reasons for so finding or
The Exchange believes that the other co-location services, the Exchange (ii) as to which the Exchange consents,
proposed rate of $75 per visit for the believes that being waitlisted for a cage the Commission shall: (a) By order
Visitor Security Escort, as opposed to will not impose a burden on a User’s approve or disapprove such proposed
$75 per hour, is equitable because all ability to compete. The Exchange rule change, or (b) institute proceedings
Users would be subject to the same fee. believes that the proposed allocation to determine whether the proposed rule
The Exchange believes that charging a procedure would establish rational, change should be disapproved.
flat fee per visit is consistent with fees objective procedures that would reduce
for other services performed by data any potential for User confusion on how IV. Solicitation of Comments
center staff, including Change Fees and cages would be allocated should it Interested persons are invited to
Initial Install Services.19 The proposed become necessary. submit written data, views, and
rate of $75 per visit for the Visitor The Exchange believes that the arguments concerning the foregoing,
Security Escort would be a fee reduction proposed amendment to the visitor including whether the proposed rule
for any visit that lasted more than an security escort fee would not impose change is consistent with the Act.
hour, and so it would reduce the burden any burden on competition that is not Comments may be submitted by any of
placed on Users that are still subject to necessary or appropriate in furtherance the following methods:
the fee. of the purposes of the Act because it
For the reasons above, the proposed would eliminate an unnecessary Electronic Comments
changes do not unfairly discriminate requirement, as the security purposes • Use the Commission’s Internet
between or among market participants that lead the Exchange to visitor comment form (http://www.sec.gov/
that are otherwise capable of satisfying security escorts are not present when a rules/sro.shtml); or
any applicable co-location fees, User representative is visiting the User’s • Send an email to rule-comments@
asabaliauskas on DSK3SPTVN1PROD with NOTICES

requirements, terms and conditions cage, because the User representative sec.gov. Please include File No. SR–
established from time to time by the would only have access to the Users’ NYSE–2016–13 on the subject line.
Exchange. cabinets, which would be in the
confined area within the locked cage. Paper Comments
19 See 2012 Release, supra note 6, at 50743, and The User representative would not have • Send paper comments in triplicate
2014 Release, supra note 6, at 45562. Change Fees
are charged per request and Initial Install Services
access to the cabinets of other Users or to Secretary, Securities and Exchange
fees are charged per cabinet or eight-rack unit in a Commission, 100 F Street NE.,
partial cabinet. 20 15 U.S.C. 78f(b)(8). Washington, DC 20549–1090.

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All submissions should refer to File No. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 A. Self-Regulatory Organization’s
SR–NYSE–2016–13. This file number notice is hereby given that, on February Statement of the Purpose of, and
should be included on the subject line 23, 2016, NYSE Arca, Inc. (the Statutory Basis for, the Proposed Rule
if email is used. To help the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with Change
Commission process and review your the Securities and Exchange 1. Purpose
comments more efficiently, please use Commission (the ‘‘Commission’’) the
only one method. The Commission will proposed rule change as described in The Exchange proposes to establish
post all comments on the Commission’s Items I and II below, which Items have procedures for the allocation of cages to
Internet Web site (http://www.sec.gov/ been prepared by the self-regulatory Users, including the waiver of certain
rules/sro.shtml). Copies of the organization. On March 1, 2016, the fees, and to amend the visitor security
submission, all subsequent Exchange filed Amendment No. 1 to the escort requirements.5 The Exchange
amendments, all written statements proposed rule change.4 The Commission proposes to amend the Fee Schedules to
with respect to the proposed rule is publishing this notice to solicit reflect the changes.
change that are filed with the comments on the proposed rule change, Proposed Cage Allocation Procedure
Commission, and all written as modified by Amendment No. 1, from
communications relating to the A User is able to purchase a cage to
interested persons. house its cabinets within the Data
proposed rule change between the
Commission and any person, other than I. Self-Regulatory Organization’s Center.6 A cage would typically be
those that may be withheld from the Statement of the Terms of the Substance purchased by a User that has several
public in accordance with the of the Proposed Rule Change cabinets within the Data Center and
provisions of 5 U.S.C. 552, will be wishes to arrange its cabinets
available for Web site viewing and The Exchange proposes to establish contiguously while also enhancing
printing in the Commission’s Public procedures for the allocation of cages to privacy around its cabinets. The
Reference Room, 100 F Street NE., its co-located Users, including the Exchange offers three sizes of cages
Washington, DC 20549 on official waiver of certain fees, and to amend the corresponding to the number of cabinets
business days between the hours of visitor security escort requirements and housed therein, and charges fees for the
10:00 a.m. and 3:00 p.m. Copies of such fee. The Exchange proposes to amend cages based on the size.7 The physical
filing also will be available for the Arca Options Fee Schedule (the footprint of each cage is greater than
inspection and copying at the principal ‘‘Options Fee Schedule’’) and, through that of the cabinets that it houses, as
office of the Exchange. All comments its wholly owned subsidiary NYSE Arca each cage is constructed so as to include
received will be posted without change; Equities, Inc. (‘‘NYSE Arca Equities’’), aisles around the purchasing User’s
the Commission does not edit personal the NYSE Arca Equities Schedule of cabinets, for accessibility and in
identifying information from Fees and Charges for Exchange Services compliance with safety regulations.8
submissions. You should submit only (the ‘‘Equities Fee Schedule’’ and, Accordingly, in order to provide a User
information that you wish to make together with the Options Fee Schedule, with a cage, the Data Center must have
available publicly. All submissions the ‘‘Fee Schedules’’) to reflect the sufficient contiguous open space
should refer to File No. SR–NYSE– changes. The proposed rule change is
2016–13, and should be submitted on or available on the Exchange’s Web site at 5 The Exchange initially filed rule changes

before April 1, 2016. www.nyse.com, at the principal office of relating to its co-location services with the
Securities and Exchange Commission
For the Commission, by the Division of the Exchange, and at the Commission’s (‘‘Commission’’) in 2010. See Securities Exchange
Trading and Markets, pursuant to delegated Public Reference Room. Act Release No. 63275 (November 8, 2010), 75 FR
authority.21 70048 (November 16, 2010) (SR–NYSEArca–2010–
II. Self-Regulatory Organization’s 100) (the ‘‘Original Co-location Filing’’). The
Robert W. Errett,
Statement of the Purpose of, and Exchange operates a data center in Mahwah, New
Deputy Secretary. Statutory Basis for, the Proposed Rule Jersey (the ‘‘Data Center’’) from which it provides
[FR Doc. 2016–05433 Filed 3–10–16; 8:45 am] co-location services to Users.
Change 6 For purposes of the Exchange’s co-location
BILLING CODE 8011–01–P
services, a ‘‘User’’ means any market participant
In its filing with the Commission, the that requests to receive co-location services directly
self-regulatory organization included from the Exchange, a ‘‘Hosting User’’ means a User
SECURITIES AND EXCHANGE statements concerning the purpose of, that hosts a Hosted Customer in the User’s co-
COMMISSION and basis for, the proposed rule change location space, and a ‘‘Hosted Customer’’ means a
customer of a Hosting User that is hosted in a
[Release No. 34–77303; File No. SR– and discussed any comments it received Hosting User’s co-location space. See Securities
NYSEArca-2016–21] on the proposed rule change. The text Exchange Act Release No. 76010 (September 29,
of those statements may be examined at 2015), 80 FR 60197 (October 5, 2015) (SR–
Self-Regulatory Organizations; NYSE the places specified in Item IV below. NYSEArca–2015–82). As specified in the Fee
Schedules, a User that incurs co-location fees for a
Arca, Inc.; Notice of Filing of Proposed The Exchange has prepared summaries, particular co-location service pursuant thereto
Rule Change, as Modified by set forth in sections A, B, and C below, would not be subject to co-location fees for the
Amendment No. 1, Establishing of the most significant parts of such same co-location service charged by the Exchange’s
Procedures for the Allocation of Cages statements. affiliates New York Stock Exchange LLC and NYSE
MKT LLC. See Securities Exchange Act Release No.
to Its Co-Located Users, Including the 70173 (August 13, 2013), 78 FR 50459 (August 19,
Waiver of Certain Fees, and To Amend 2 15 U.S.C. 78a. 2013) (SR–NYSEArca–2013–80).
asabaliauskas on DSK3SPTVN1PROD with NOTICES

the Visitor Security Escort 3 17 CFR 240.19b–4. 7 See Securities Exchange Act Release No. 67667

Requirements and Fee 4 In Amendment No. 1, the Exchange clarified the (August 15, 2012), 77 FR 50743 (August 22, 2012)
proposal to specify that the visitor escort fee is (SR–NYSEArca–2012–63) (‘‘2012 Release’’). A User
March 7, 2016. equitable because all Users of the Exchange’s Data must have at least two cabinets in the Data Center
Pursuant to Section 19(b)(1) 1 of the Center would be charged the same fee. The to purchase a cage. See Securities Exchange Act
Exchange also clarified the proposal to specify that Release No. 72720 (July 30, 2014), 79 FR 45577
Securities Exchange Act of 1934 (the while an individual User is on the waitlist for a (August 5, 2014) (SR–NYSEArca–2014–81) (‘‘2014
cabinet, it will be granted a fee waiver for 2 bundles Release’’).
21 17 CFR 200.30–3(a)(12). of 24 cross connects to be used to connect that 8 For example, a cage for 20 cabinets takes up as
1 15 U.S.C. 78s(b)(1). User’s non-contiguous cabinets. much floor space as 33 cabinets.

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Document Created: 2016-03-11 01:51:26
Document Modified: 2016-03-11 01:51:26
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 12998